Stop Brexit blather and face reality on trade, says ex-EU ambassador

Britain must face reality on post-Brexit trade rather than continue the “buccaneering blather” of hard Brexiters, the UK’s former chief EU diplomat Sir Ivan Rogers has said.

Rogers, the former chief Brussels adviser to both David Cameron and Theresa May, took aim at the prime minister’s Brexit strategy in a peech on Wednesday, but also criticised the plans of both hardline remainers and leavers, calling them “bluntly, delusional”.

In a thinly veiled attack on Boris Johnson, the foreign secretary, and Liam Fox, the international trade secretary, Rogers said he despaired of “people professing themselves free traders who have only a hazy understanding about multilateral, regional and bilateral free trade deals, have never negotiated one – but know it’s straightforward, once one has left the EU.”

Rogers hinted there may still be a permanent deal to be done where the UK would drop some of its red lines in exchange for “quasi-single market membership, paying something for it, living under [European court of justice] jurisprudence and jurisdiction in goods, but disapplying the fourth fundamental freedom, free movement of people.”

A customs union is an agreement by a group of countries, such as the EU, to all apply the same tariffs on imported goods from the rest of the world and, typically, eliminate them entirely for trade within the group. By doing this, they can help avoid the need for costly and time-consuming customs checks during trade between members of the union. Asian shipping containers arriving at Felixstowe or Rotterdam, for example, need only pass through customs once before their contents head to markets all over Europe. Lorries passing between Dover and Calais avoid delay entirely.

Customs are not the only checks that count – imports are also scrutinised for conformity with trading standards regulations and security and immigration purposes – but they do play an important role in determining how much friction there is at the border. A strict customs regime at Dover or between Northern Ireland and the Republic of Ireland would lead to delays that will be costly for business and disruptive for travellers. Just-in-time supply chains in industries such as car making could suffer. An Irish peace process built around the principle of entirely unfettered travel between north and south could be jeopardised.

He said the EU would have to weigh the cost of dividing the “four freedoms” and the benefits of a close deal with a major strategic partner.

“The sooner we realise there are no perfect choices, that there are serious trade-offs between sovereignty and market access interests … and where it is purely notional and actually a material loss of control, the better for the UK.”

Rogers, who resigned in January 2017, said all current schools of thought on Brexit, including remainers wishing to reverse the referendum result via a new vote, were “fantasies or incoherent and muddled thinking”.

He said the UK had long lost any credibility that it would walk away from negotiations with no deal, firstly because it was “self-evident” that no-deal would be vastly worse than even a standard Canada-style free trade agreement, and secondly because of the lack of any alternative regulatory preparation.

In the lecture at the University of Glasgow, Rogers said May was in danger of “mis-selling the British people” about the trade-offs Brexit would entail.

“No trade policy with third countries, however successfully aggressive, will deliver very quick results, or ones which on any serious analysis will transform the UK’s productivity performance and economic prospects,” he said. “More than 65% of all UK exports are, after all, to the EU or to countries with whom we already have a preferential deal via EU membership.”

He said the UK would not get any serious role on policy-setting from outside the bloc without May shifting her red line on the jurisdiction of the European court of justice. “That was promulgated as a red line when no serious thought at all had been given to these questions,” he said.

“For the other side, continuity on day one [of Brexit] is the reddest of red herrings. They want to know where we intend to end up on day two, day 200 and day 2,000. And they assume that must be really rather radically different, or we would not be Brexiting.”

Brexiters promoting the benefits of a raft of new trade agreements meaning cheaper products for UK consumers should be honest about the consequences, he said.

Cheaper bananas could come at the expense of African and Caribbean producers – Commonwealth countries – and cheaper lamb and beef from Australia, New Zealand and Argentina at the expense of British regions.

A US trade deal would be contingent on accepting their agricultural standards, and a Chinese deal on access for their steel and aluminium, far beyond what the US and EU have accepted, he said.

Rogers said discussions of post-Brexit alternative models, including EEA membership, the customs union and border scenarios that could be adopted ranging from the Swiss-EU border to the Canada-US border, were subject to “extraordinary misconceptions – most inadvertent, some I fear entirely deliberate – of what post-Brexit options there are.”

He said his former Swiss and Norwegian counterparts “despair at the mischaracterisation of their models” and the trade-off between sovereignty and maximising market access they had made.

“Ruling out these options before truly understanding what either meant, or whether variants on them might be viable, was, in my view, simply an act of folly,” he said.

He took aim at the centring of the UK debate on the future customs arrangements, saying the Brexiters’ preferred option of a technological solution to the Irish border question – the maximum facilitation model – “will never be accepted by the 27 side of the table. Not now. Not in five years. Not in 105 years.”

Rogers said the argument that the decision to erect a hard border would be the choice of the EU or Dublin was “simply legally untrue”.

He said he also had doubts about the other customs option – the customs partnership favoured by May, where the UK would collect tariffs on behalf of the EU. He said it was viewed in Brussels as “an unprecedented scheme to hand a foreign power the business of collecting revenues at great cost and at clear risk to their revenues”.